“Dinar devaluation is slaughter for company” (Samir Majoul)

(TAP / interview by Nedra Boukesra) – The lack of administrative continuity, the mismanagement of state-owned companies, the increase of the tax burden and the informal economy are all issues that concern the new president of the Tunisian Confederation of Industry, Trade and Handicrafts (UTICA) Samir Majoul.

In an interview with TAP, Majoul, 62, places emphasis on the collective responsibility of the State, employers’ organisations and employees in managing the “particularly worrying” economic and social situation in the country.

This family business leader specialising in agribusiness, does not hesitate to express the headache of Tunisian business leaders of the “mismanagement” of public finances and the informal economy.

With his knowledge of the workings of this employers’ organisation where he has assumed various trade union responsibilities, he replaces Wided Bouchamaoui, at the end of the 16th UTICA congress, held on January 17th in Tunis.

TAP: What is your reading of the economic and social situation in the country?

SM: The economic and social situation in the country is particularly worrying. The situation is difficult for the government and for all of us. The nation is a responsibility in our hands to all (employers, government and workers’ organisations). We can find solutions to problems with a minimum of vision and in one direction, namely development and investment.

TAP: What do we need to move forward?

SM: We need a climate where everyone finds their account, plays their role and is happy to do so to preserve the invulnerability of this country that we want to keep for Tunisians and preserve for our children, so that they can live in dignity and that upon leaving the university, they find a job or the opportunity to create a project.

TAP: In 2014, UTICA presented to the political parties, a document containing its proposals to get the Tunisian economy out of the crisis, this document, is it still in force or will you make other proposals?

SM: The document focuses on a vision of the Tunisian economy until 2020 and does not require a revision because nothing has been done. If we had applied at least part of that vision, we would not be there. This document, which has been prepared by several Tunisian experts of great value, under the aegis of the UTICA, has dealt with all the aspects that could constitute a brake on the economy.

“Any change in the Prime Ministry is a factor of instability”

TAP: But since this document, the government has taken initiatives to restore the economy, are they sufficient?

SM: I will not talk about the past. The problem with the government’s initiatives is that the government also had its problems. We have had eight governments, which is not conducive to improving the economic environment, because any change in this area and particularly at the level of the Prime Ministry is a factor of instability. That there are changes at the team level is normal, those who succeed remain and those who succeed less leave. But when the government is unstable, it is difficult to ask the government to follow up on the issues. Normally, there needs to be continuity in government and administration, but this is not always the case, which is a barrier to investment and economic action.
There must be administrative continuity in the processing of economic files that the minister stays or leaves. There are also bills that go to the House of Peoples Representatives (HPR) and that sometimes are slow to be examined because it also has its responsibilities. And what we want is a fast-track, a special corridor for rapid processing of economic bills.

TAP: So what can still be done?

SM: In my opinion, what should not be done to discourage investment? When we speak of investment it is first of all foreign investment and the foreign investors trust at first, in the opinion of their peers already settled in Tunisia (their problems, they are happy of their settlement in the country ), then they do a benchmarking to compare between the different sites.
What we all want is that Tunisia be the priority of foreign investors.
In their analyzes, they scrutinise the indicators, is the country safe? Is social peace (which has not always been there) guaranteed? are the bosses and the workers’ organisation close so that in case of conflict, they will try together to find a solution. In fact, that’s what we did in some areas. Sometimes it does not work because there are exogenous factors.
So we do what we can even do if we are convinced that it is not enough. In fact, if we could all think that we can do more for our country, progress will be made.
Moreover, we observe fewer and fewer conflicts, especially as another approach is adopted to manage them. In this regard, UTICA and UGTT launch the project of “General Strike against Strikes”, slogan through which, the two organisations will intervene whenever there is a conflict that can derive, to avoid it. We can no longer allow strikes because this country needs to produce, again and again, to export, to create wealth and to distribute income.
When we speak as employers, we are not talking only about the private sector. It is a global philosophy, we know what the country has lost due to the situation in the phosphate sector in Gafsa and in the oil companies. If the losses incurred in terms of production and exports were returned to the coffers of the State, our debt would not have reached this threshold and our foreign currency reserves would not be established at – 90 days and … maybe our dinar would not have slipped by 25%.
Why do I talk about it, because we are there too to find solutions, we are a force of proposal and solutions must be jointly identified by the public and private sectors which must support each other.

“We expect from our European partners more financial support”

Regarding the economy, Tunisia is a small country and to save the national economy, we need international solidarity because the country can be a safety belt for the world, the Mediterranean and Europe, which put a crazy money to save Greece. But what has been his contribution to Tunisia ?, while it complains of the influx of immigrants.

Moreover, these immigrants come mainly from Libya, only a minority comes from Tunisia. But if we guaranteed these people a dignified life and a stable job, they would not take a boat to go die in the Mediterranean.

So, we expect from our European partners more support in terms of investment and financing, given the role played by Tunisia and the example it has given. We do not want charity and we are even demanding conditioned funding, not to pay salaries but to invest in industrial areas, a deep-water port … What they gave to Greece could make Tunisia, the most viable country in Africa and the Mediterranean. We are south of the Mediterranean, Tunisia has left its revolution behind, while other countries still have it before them, so there are still homes in the region that could explode at any time, of course, I hope they will never burst.

I hope that in Tunisia we will have another economic and industrial revolution and, above all, an awareness of what each of us can do for this country. As employers, we say stop all the waste that is being done in the country at the levels of the Gafsa phosphate company, oil exploration or social funds. It is also necessary to review the General Compensation Fund. It is not normal for public enterprises to be kept afloat, while they are uncompetitive, poorly managed and lose money. We can not afford to subsidise these companies. On the other hand, we want efficient public companies, leaders who are the locomotive of the country and serve as an example compared to the private sector, because that also conditions the competitiveness of the Tunisia site. When a foreign investor arrives in Tunisia, he must find a competitive site at all levels. He must also find a competitive industrial zone equipped with all the necessary services (water, electricity competitive in power and costs, connection, competitive human resources (thank goodness we have quality). The same applies to the Tunisian industrialist who must benefit from the competitiveness of its environment and must not have the extra cost of a poorly managed environment We must have an administration that assists and encourages you, while being ready to support you in case of difficulty.
The formalities must be done in one day for example to change the vocation of a field. The entrepreneur is formatted to run a business and not to deal with an administration. This one must help the entrepreneur. Our banks also have to evolve and become business partners.

“We call for a fast-track system”

TAP: The government has initiated initiatives to reform the banks, the administration, is this up to your expectations?

SM: The government also needs support because the approach it is taking is very courageous and we expect it to be supported, first by the administration because it may be traditionalist or conservative etc. It must also be supported by the national organisations, this is our case and that of the UGTT. We have always done it, there is no reason not to support it. Personally, I do not understand that a national organisation does not support its government, we can have a dispute over a file, but we sit around a table and negotiate. We want to have a stable government. In addition to the administration and the national organisations, the government must be supported by the parties, otherwise the laws it proposes can not pass to the HPR or be emptied of their content. Often they pass, but more than a year after their submission. There is even funding that we missed, because the legislation was not passed in time. Often it is urgent and the economy can not wait, hence the need to have a fast-track system with the HPR for the Prime Minister to decree these texts. We wish there is an emergency plan. We must simplify the management to everyone because the country has many issues and our youth is waiting. Maybe we waited too long. And instead of waiting, each of us must do our part. I say it for ourselves and for everyone. If we all get on with it, God willing, we’ll get away with it. Things have to get better as soon as possible and without breaking the machine, because there are balances to maintain and electoral events. If we forget these events and our careers, the country would be doing very well.

TAP: What do you mean by economic emergency law?

SM: When there is a decision to be made, the Prime Minister can do it in the next minute but it is necessary that the law gives him this possibility, emergency economic law, the UTICA not being in the considerations policies. The private sector needs security and stability, when there is a social conflict, we intervene immediately. But conflicts arise for other reasons that may be political, it is inadmissible.

TAP: Was it the case during the last events?

SM: For some regions, it was, but for the UTICA it is necessary to avoid this kind of situations, fortunately in the meantime, the situation has improved. However, there are uprisings whose causes, logic and timing are not understood. Besides, why each time, the months of December and January are they marked by this kind of events?
Listen, we have a responsibility to our young people, we promised too much and the machine did not help us much to achieve their ambitions.
We have just completed a tour in 24 regions as part of the preparations for the 16th UTICA Congress and we have been able to listen to business leaders, trades people and services, including freight transport, who suffer. They are afraid for their country but fear above all for their economic survival. In the craft sectors many people can not reach the SMIG. This sector has suffered a lot, because it has lost its tourist clientele with the situation in Libya but especially with everything that happened in Sousse and the Bardo Museum. We have operators who are suffering and we do not have the right to disappoint them. They expect solidarity from their state, government and political leaders.
We had so many projects and instability that we did not focus on these social situations. Thank God the Tunisian economy has been resilient.

TAP: With the current budget deficit, are we still going to have that resilience?

SM: This deficit comes to us from critical management operations, the public salaries that were tripled between 2011 and 2017, which caused an abysmal deficit of public finances to the point where the IMF had to intervene every time to say that the payroll is too high.
If the State has been able to multiply wages by three it can still help the suffering operators, moreover, these artisans of whom I spoke are not responsible for their disappointment, not responsible for the revolution, nor acts of terrorism. After, we ask ourselves questions about why protests. The answer is that we remember them only during the elections. We must help them. Citizens pay taxes to find support the day they need it.

TAP: UTICA has often complained about not being listened to and threatened to use other means to make itself heard? Like going down the street

SM (with derision): But we are still in the street, our shops are in the street, we walk in the street, our carriers, our taxis are also, in fact, we are not in the living rooms. In post revolution, the general idea is that whoever goes down the street gets what he wants. At national council meetings, artisans, business leaders and members of the regional national trade union chambers are asking us to go out on the streets because that is the only way to pressure them. We do not necessarily agree on this method, we still hope to win through consultation and negotiation. We use the legal means that are allowed by our constitution. We are an employers’ organisation. We have the right to go on strike and shut down businesses if there is no listening because we are not allowed to work at a loss. We are here to produce, to create and not to strike, the proof is that we have proposed a general strike against the strike. The worst thing that can happen to an industrialist or a trader is to be forced to close his factory. What is more serious is to continue operating at a loss.

“You have to have anti-dumping barriers”

TAP: You quoted the craft sector, but there are other sectors that are affected, such as textiles, leather and footwear, UTICA did not do much to save them and the FENATEX even threatened to leave the organisation

SM: First of all for textile and leather, we have piloted recovery plans. As for the release of the FENATEX, this threat was made in a political objective which we will talk about maybe another day. Moreover, those who uttered this threat were with us at the last congress. How UTICA is responsible while we are the first organisation to ask to protect the country from dumping states, including Turkey. Ask what the state has done for these sectors. Since 2011, all our costs have exploded but operators who lost orders in the textile industry did not lose them simply because there were cost increases, but because of a break in the logistics chain, problems at the port of Rades and delays in supplying the European market. The shift of the dinar did not help to improve things.

TAP: What about leather and shoes?

SM: We piloted a rescue plan, but it was the application that was not there.
To return again to the textile sector, in some textile sectors, such as weaving, there is nothing more to do, but there are also a lot of sectors that have resumed and work very well. The sector was the first to benefit from the upgrading plans. We know that we are going to lose some channels but that we can face the Chinese or Turkish competition where the textile industry is supported by the powers in place, that’s why we are calling for the establishment of anti-dumping barriers.
Their economies are not transparent (employment of children, public subsidies, lack of social policy), whereas in Tunisia for a very long time, we have not made the economy, but the political and social, since the attention of the leaders is focused on the elections. In my opinion, the one who focuses on his political career, must leave the government. Populism does not restore discipline. Tunisia is bankrupt and does not have the right to have public companies subscribed to the losses.

TAP: you know better than me the position of the UGTT concerning this question. For the union, public companies are a red line?

SM: If public companies are a red line, do not impose taxes to compensate for losses, I too have red lines. These companies remain state property, no problem, but we want a successful public company. Because if it is in deficit, it is the taxpayer who pays it in one way or another. We are not in favour of privatisation at all costs, especially if the sale of the company does not achieve the expected objectives, but we must at least clean them up because they are a source of problems and taxation for the private sector. We have often discussed this issue with the UGTT and I believe that its position is changing.
Are we happy with what is happening in Tunisair where the delays can go up to 5 hours, it is a handicap for our tourism and for the private sector. Public companies must be efficient and be our pride at all. The losses of these companies are losses for the development of the country whereas only the public investment can make things move (roads, hospitals, academic institutions).

TAP: Social negotiations should start soon between UTICA and UGTT? How will you approach them?

SM: We will see each other, listen to each other, try to understand each other and make each party know what the real situation of their partner is. I will be frank, generally, what business leaders give as increases, they find it in the turnover of their companies since these increases will stimulate consumption. In general, we are not against an increase, especially when it is justified and associated with a gain in productivity and an improvement in the economic situation of the company. But if this increase is not justified by an increase in productivity, jeopardises the sustainability of the company and causes an increase in costs, we reject it. The answer will depend on the situation of each sector. There are sectors that can, others that will be able to do less and others that will not be able at all. In this case, it is necessary to find a solution through administrative or fiscal measures. In Tunisia, the social and fiscal pressure is heavy and the measures taken under the finance law constitute an overload for the company. Today, people are fed up. They are tired.

TAP: You said UTICA will not discuss the 2018 Finance Act again, so how?

SM: The finance law is decreed, it is applicable, but the government must take compensatory measures. Each sector will prepare its grievances. Customs and consumer duties imposed under this law may lead to lower turnover and benefit the informal sector. We also hope that the economy will change and that the dinar will improve because the company has suffered well from the devaluation of the dinar, it is a slaughter for the company, especially the one that imports a good part of its raw materials. The dinar has lost so far nearly 30% of its value. This loss was made overnight. Moral of the situation, we know who paid the bill, it is Tunisia who paid for it and it is a general impoverishment of the country.

TAP: UTICA is not financially autonomous and relies on public funding

SM (angry): But this is our money, it is a social contribution of 0.5% paid by the companies since the 70s and which amounts to 60 billion per year, moreover we consider ourselves aggrieved financed by the State.

TAP: What does UTICA intend to do with businessmen who are increasingly sourcing raw materials and the like from the parallel market and using this means to escape the tax?

SM: Instead of telling businessmen, I will tell officials: if you do not find a solution to the informal, more and more economic operators will go into the informal because they are subject to a high tax burden. Despite the large proportion of the informal economy (50 or 54% of the economy), the state continues to impose transparent business. An environment where all informal practice is discouraged and all formal practice encouraged and not penalised, as is the case today, must be put in place.
The state must set an example in terms of good governance and not put economic pressure on business leaders to fill the deficits of public enterprises. We have submitted several proposals to combat the informal, including the change of bank notes to reduce liquidity that circulates out of the banking system. We also advised to allow Tunisians to hold foreign currency accounts. It is also about raising tariff barriers that are not too high for any product coming in from abroad, especially the products that are needed. If we study this well, we will find that even the informal has a cost of about 16% in bribes and other, so why not subject these products we need to a VAT of 16% for limit parallel trade.